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SoftBank to take control of WeWork: Sources

cnbc.com

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Re: SoftBank to take control of WeWork: Sources

#171

Post by bflesch »

jimmywanger wrote: post #131
CrazyStat wrote: post #119

Earlier quoted context omitted.

The peacetime version of WeWork that you envision already exists, it's called IWG. It's roughly the same size as WeWork but it's only worth $4.5b. Paying $5b for 70% of it doesn't seem like a good idea.

https://finance.yahoo.com/quote/IWGFF?p=IWGFF&.tsrc=fin-srch This looks like the upper limit for WeWork. It doesn't matter how much nicer looking their offices are or if they have free beer bashes and parties, those expenses are all tiny when it comes to the bottom line of a multibillion dollar corporation. Plus, Regus has more desks and branches than WeWork, and is orders of magnitude less expensive.

From my experience here in Germany, Regus is in fact more expensive than WeWork. And they have worse contract conditions, e.g. no free coffee, many upsells, bad contract durations, and intransparent add-ons.

Re: SoftBank to take control of WeWork: Sources

#172

Post by DebtDeflation »

Traster wrote: post #12

It's very difficult to see how SoftBank breaks even on this new deal. They're investing $5bn now, with the hope that it's worth more than that when they IPO, but several things have killed that idea. Firstly, their brand is tarnished. Secondly, the growth play will be gone by the time they IPO. Thirdly, the charismatic leader is gone, so the message of "Disrupting" and "We're a tech play' is gone. They've put $5bn in…

Fourthly, we're now in the longest economic expansion on record and overdue for a recession, which a number of economic indicators seem to imply is coming in the near future. A looming cyclical collapse in demand for office space is not something any of the valuation models being applied to WeWork seem to be taking into account.

Re: SoftBank to take control of WeWork: Sources

#173

Post by DebtDeflation »

AbrahamParangi wrote: post #141
dannykwells wrote: post #137

Earlier quoted context omitted.

I'll be honest here, cry me a river. Everyone who joins a pre IPO company should value their stock at 0.

That seems uncharitable given the CEO looks to be walking away with ~$900M total from the endeavor while everyone else gets... nothing? Probably?

>the CEO looks to be walking away with ~$900M total from the endeavor

How much of the previous $700M did he actually walk away with though? Everything I've read suggests that he only sold a small portion of the $700M in stock, and the majority he kept and borrowed against to buy the buildings he leases back to WeWork. In one of the negotiations post IPO collapse, he agreed to give any profit he makes off those leases back to WeWork. Also, at what valuation level for WeWork is $700M for his equity even based on?

Re: SoftBank to take control of WeWork: Sources

#174

Post by ceejayoz »

semi-extrinsic wrote: post #140
ceejayoz wrote: post #116

Earlier quoted context omitted.

Where'd you get the idea that a Mars trip is going to involve three years of zero-G? A Hohmann transfer orbit (minimum energy) will get you there in nine months. SpaceX is targeting a higher energy, shorter trip that'll probably wind up being about six months each way (with Mars gravity in the middle).

I agree with you that the no-gravity part is likely doable with an acceptable risk. What I haven't seen are actual solutions for how to deal with the radiation. Yes, there is ongoing research from NASA, ESA, JAXA and others, and lots of interesting proposals like hydrogenated boron nanotubes, electromagnetic force fields, lithium shields etc. But no solutions even close to implementation. Here's from an ESA blog post…

> What I haven't seen are actual solutions for how to deal with the radiation.

https://www.nytimes.com/2013/05/31/science/space/data-show-h...

"According to the National Cancer Institute, the lifetime risk of dying from cancer is 21 percent; the two-thirds of a sievert from a round-trip mission to Mars would raise that risk by three percentage points, to 24 percent."

Mars advocates like Zubrin argue the "acceptable dose limits" are exceedingly conservative, and that NASA willingly permitted far more dangerous operations (like the Shuttle) than radiation incurs.

> It's certainly never been tested before.

Sure it has. https://en.wikipedia.org/wiki/MARS-500

Re: SoftBank to take control of WeWork: Sources

#175

Post by CrazyStat »

bflesch wrote: post #171
jimmywanger wrote: post #131

Earlier quoted context omitted.

https://finance.yahoo.com/quote/IWGFF?p=IWGFF&.tsrc=fin-srch This looks like the upper limit for WeWork. It doesn't matter how much nicer looking their offices are or if they have free beer bashes and parties, those expenses are all tiny when it comes to the bottom line of a multibillion dollar corporation. Plus, Regus has more desks and branches than WeWork, and is orders of magnitude less expensive.

From my experience here in Germany, Regus is in fact more expensive than WeWork. And they have worse contract conditions, e.g. no free coffee, many upsells, bad contract durations, and intransparent add-ons.

That's because Regus actually makes money, while WeWork is burning cash at an unsustainable rate in an attempt to grab market share.

WeWork can't keep it up forever. Eventually they have to raise prices and/or cut perks (probably both).

Re: SoftBank to take control of WeWork: Sources

#176

Post by skinnymuch »

ww520 wrote: post #98

Actually SoftBank is getting a good deal, using $5B to get a controlling interest of WeWork at 70%, wiping out all the commons and other LP's. If they can cut out the slacks and focus on the core value proposition, WeWork can work after 4 to 5 years. The WeWork brand is unique and valuable. They did that to Priceline in the past. Priceline was almost dead at one point. Got sold at a fire sales. They hunkered down and…

Could you say when this Priceline thing happened?

Re: SoftBank to take control of WeWork: Sources

#177

Post by skinnymuch »

cookie_monsta wrote: post #73

I don't really get the ongoing obsession with We/Softbank. I kind of got the whole schadenfreude side of it when it all came tumbling down but now it's just turned into a story of a big company trying to dig itself out of a hole created by some dumb decisions it made. Is there some larger relevance that I'm missing?

Definitely I think it has to be that the company was trying to go public. With S-1 filing meaning they wanted to within a month. I also think it’s possible if WeWork IPO’ed in late 2018 or right before Lyft in 2019 and/or the “valuation” never spiked to $47B, it could’ve gone public.

One problem is their revenue doubled in the past year while maintaining losses which is a good thing. They wouldn’t have had that same giant revenue to boast about if the S-1 was filed 3 quarters earlier.

Nonetheless, actually giving out the S-1 makes this fun and juicy news. Having SoftBank/Vision Fund behind it, and billions in funding from other investors as well makes it even more interesting. The founders and their corruption and bullshit, specifically Neumann, add on to this as well.

Re: SoftBank to take control of WeWork: Sources

#179

Post by ksec »

dodobirdlord wrote: post #162
ksec wrote: post #144

Earlier quoted context omitted.

>So isnt this a recapitalization of the firm? Why would they need to pay $200M for control if the alternative is some variation of bankruptcy followed by a firesale and cheap buy? Because it is obvious if they do Firesale and Cheap buy they would have destroy the company and buy something that everyone knows isn't remotely worth that much. By trying to save it now they could at least get back some of its investment v…

They could probably sue him. As a member of the board of directors he still has an obligation to act in the interests of the shareholders even if he controls a majority of the votes.

Wow, so it turns there is a difference between Majority of shares (50%+) and Majority of Voting Power.

So hypnotically could he have done it if he had 50%+ vote? Or could he still be sued? And by watching everything burn, I mean he could try to spin it as he will take drastic action to improve on the situation and refuse Softbank's offer.

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